Board of Equalization headquarters move not yet justified, audit says

Just days after Gov. Jerry Brown signed legislation allowing plans to be developed for a new headquarters for the State Board of Equalization, the state auditor warned Thursday that the state has not yet prepared a properly supported analysis demonstrating that moving from the current problem-plagued building will see more benefits than costs.

The headquarters building in Sacramento houses 2,200 people and was built in 1992. Early in its use, the structure had extensive problems including windows falling from high floors, water bursting into open office spaces, and free-falling elevators.

So far, the state has spent $60 million on repairs and estimates it could cost another $115 million to address remaining problems. Some estimate it will cost $500 million to move to another building.

The bill signed by Brown on Friday requires a study to identify the three worst buildings in need of work or replacement and preparation of bidding for design and construction work.

The audit Thursday by State Auditor Elaine Howle said the board needs to do more work.

“Many of [the Board of Equalization’s] estimates and assumptions, including its claim that it could increase state tax revenue collection by 5 percent, do not have adequate support or rationale,” Howle wrote to the governor and Legislature. The audit said “moving [Board of Equalization] headquarters to a new facility may, in fact, have net fiscal benefits for the State. However, these benefits would erode quickly if General Services does not have a plan in place for the future use or disposal of the building.”

Board member George Runner said the audit is “a clear indictment of the state’s efforts so far in dealing with the Board of Equalization’s problem-plagued headquarters, which is literally falling apart.”

Runner agreed that “More work is needed.”